China's move to become the biggest shareholder in Anglo-Australian miner Rio Tinto could prompt an investigation by Australian regulators.
Chinalco executives have met with Australian ministers
Australian's Prime Minister Kevin Rudd said that the deal should be assessed on the basis of national interest.
Last week, China teamed up with US firm Alcoa to buy 12% of Rio's London-listed shares for $14.05bn (£7.1bn).
The state-owned Aluminium Corp of China (Chinalco) said the purchase was China's largest investment overseas.
Chinalco's president Xiao Yaqing met with Australian ministers to ease concerns that it may try to launch a takeover of Rio Tinto, which is listed in Australia and the UK.
"The reason we have Foreign Investment Review Board (FIRB) guidelines and a foreign takeovers act is to ensure that the Australian national interest is always met," Mr Rudd said.
"Deliberations on any significant foreign equity in an Australian firm, whether it's from the United States, Japan, China...those guidelines are there, they will be applied," Mr Rudd said.
The deal, financed by the state-run China Development Bank, does not automatically qualify for a review by the Australian regulator.
China's stake in Rio Tinto could stall efforts by the world's largest miner, BHP Billiton, which is also Anglo-Australian, to buy Rio.
"The Chinese fear that a combined BHP/Rio could have excessive control over the price and supply of the raw materials, such as iron ore, that feed the great Chinese manufacturing machine," BBC Business Editor Robert Peston said.
CHINESE OVERSEAS INVESTMENTS
Rio Tinto $14.2bn
Standard Bank $5.6bn
Morgan Stanley $5bn
Source: Thomson Financial/Reuters
"It was the most aggressive intervention in a western commercial deal ever made by the Chinese," the BBC's business editor said.
BHP must make a firm offer for Rio by 6 February or shelve plans for six months.
Rio Tinto had asked the UK's Takeover Panel to force BHP to formalise its all-share bid, worth around $140bn.
In November BHP proposed an offer that involved swapping three BHP shares for every Rio Tinto share.
Rio has so far spurned BHP's overtures, saying it fundamentally undervalued it and its growth prospects.
Alcoa and Chinalco said on Friday they didn't intend to make an offer for the whole of Rio Tinto.
But they said they reserved the right to do so if Rio received a firm bid from a third party.
Chinalco and Alcoa invested in Rio through a Singapore-based entity, with Alcoa contributing up to $1.2bn.
The Chinese firm owns 8% of the total firm, which is also listed in Australia, and exercises control of 9% through its partnership with Alcoa.
The Rio acquisition is China's latest big overseas purchase, as the country uses its deep pockets to secure access to natural resources and other strategic industries.
Outbound deals from China nearly doubled last year to $29.5bn, according to data from Thomson Financial.
The biggest such deal was Industrial and Commercial Bank of China's (ICBC) $5.6bn investment in South Africa's Standard Bank.
China's deal-making has raised concerns in places like the US, that fears a loss of control in key industries.
In 2005, China's $18.5bn bid for US oil producer Unocal stumbled in the face of political opposition.